Qualified Partnership Plan Long Term Care Policies, Married Couples, and Medicaid

Thursday, September 29, 2016

    As discussed in another article published on this web site, Long Term Care Qualified Partnership Plan (QPP) insurance policies can be one way to save extra resources from Medicaid.

    Please see the earlier article for a more detailed discussion of this idea.

    It is important to remember that a Qualified Partnership Policy does allow a Medicaid recipient to save more money from a Medicaid spend down.  However, it is also important to clarify that a Qualified Partnership Policy does not allow the well spouse of a Medicaid recipient to keep more money than they would otherwise be able to keep in a Medicaid spend down.

    The amount that the well spouse can keep is called the Community Spouse Maximum Resource Standard, or the Community Spouse Maximum Resource Allowance.  Ordinarily this amount is half of the total available assets owned by Husband and Wife (whether held individually or jointly), or (in 2016) $119,220, whichever is less.  For more on this, see other articles on this web site.

    The amount of the Community Spouse Maximum Resource Allowance is not changed by the Qualified Partnership Plan.

    It is only the Medicaid recipient who can keep more money than is usual as part of a Medicaid spend down.

    However, because a transfer between Husband and Wife is not a disqualifying transfer for Medicaid, as soon as the ill spouse has qualified for Medicaid, this extra amount can be transferred from the ill spouse to the well spouse.  This has the same net effect as if the Community Spouse Maximum Resource Standard was increased.

    To be able to do this, however, the ill spouse must still be capable of making the transfer, or there must be some other mechanism to do this.

    One of the best ways that this could be done is to have in place a Power of Attorney that will accomplish this.

    Many powers of attorney do not give this power.  In general, a power of attorney will only allow the agent (the attorney in fact) to do things that are in the narrowly construed best financial interest of the ill spouse.  This is true even if the power of attorney says that it grants the agent the power to do anything that the principal (the person giving the power of attorney) can do.  

    It can be very important to specifically state in a power of attorney that the powers conferred include the power to make gifts to the spouse.  If the attorney in fact is the well spouse, it can be important to specifically state that the attorney in fact can use the power of attorney to benefit himself or herself.  These powers are called gifting powers, and self dealing powers.  See other articles on this web site for more information.  

    If the ill spouse lacks the ability to make the transfer himself or herself, and if there is not an effective power of attorney, then it may be necessary to get a conservatorship from a court in order to make this transfer.  It may be possible to get a one-time conservatorship, but this may not be possible in all counties or in all circumstances.  For more on this, please see other articles on this website.

    As always, consulting with a well qualified elder law lawyer well in advance of such needs arising can be very important in order to save both financial costs and stress and emotional costs that often arise when such strategies must actually be implemented.